Norway's Den norske Bank is making a long-awaited bid for the country's local savings bank. DnB dubs this its dream deal, but there is no guarantee that it will go through.
On March 13 DnB and Union Bank of Norway, or Gjensidige NOR, announced that they were in talks about a possible merger. Five days later they announced they would put an offer of 6.2 DnB shares per UBN share plus NKr23 ($3.13) per UBN share to its shareholders.
Last May DnB proposed a deal with Norwegian insurance company Storebrand. Many of the bank's shareholders and analysts felt it should hold out until UBN was demutualized. Amit Mehta, banks analyst at Morgan Stanley, says: "I think why the Storebrand deal broke up was pretty much because DnB shareholders put their foot down, with the exception of the government, and said 'look this is not the right deal for you. Be patient. It doesn't make sense'."
Now a merger between UBN and DnB would fulfil the Norwegian government's long-held wish to create a national banking champion. The new entity would be the fifth-largest Nordic bank in terms of total owned and managed assets (see table).